When you are thinking to explore a franchise opportunity, your franchisor will give you two crucial documents i.e. a franchise agreement and an FDD. According to law, the franchisor must handover an FDD file to you at least 14 days before signing the franchise agreement. The FDD is complex and lengthy too and so, you need a good time to understand and agreed to every mentioned clause before signing up the agreement. In order to understand everything mentioned in the FDD, you need to consult a Franchise lawyer related to your business. If you are interested in buying a restaurant franchise, you must consult with an experienced restaurant franchise attorney to understand the clauses in a better way. To keep your franchise business safe and sound from all financial and legal implications, consulting an experienced franchise lawyer is a must. He can easily highlight the clauses that can be a reason of problem in future for you. They ensure your rights are reserved in the best possible manner. Here are five reasons to hire a Franchise lawyer before signing a franchise agreement 1. Franchise agreement should be a copy of FDD Numerous issues need to be checked in FDD’s clauses, but from all, terms and conditions should be carefully viewed by your franchise lawyer. The problem stands for the franchisee when franchise agreement says one thing and FDD says something else. 2. To know the franchise agreement termination clauses The termination of the franchise agreement from franchisor's side can be easily known by reviewing the FDD file in detail. You, being a franchisee, need to know under what conditions, franchisor can terminate the franchise agreement. In every franchise agreement, termination clause is discussed in detail. Read it carefully. 3. To know what will happen if franchise agreement expires? Every agreement including franchise business has its expiry. In this case, renewal of the agreement is desired to continue running the business's operations, but for that, you need to satisfy certain conditions. 4. Your territorial rights should meet your expectations You should contact a franchise lawyer to ensure your territorial rights are preserved according to your expectations. 5. To understand crucial points in the franchise agreement If a dispute occurs between you and your franchise agreement, FDD clauses will tell you what steps need to be taken by you.
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AuthorMr. Herman has lectured at the First Annual Franchise Conference held in Shanghai, China in October 1998. He has also lectured on Franchising Issues in San Jose, Costa Rica in September 2001, and with the ABA Forum on Franchising in Orlando, Florida in October 2005. Archives
May 2018
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